Any budget discussion must begin with an honest determination of how much money you actually have to work with each month. Do you know what your real average monthly income is?

There are two ways to look at your “monthly income.” There is “gross income” and “net income.” Your “gross income” is the total you actually earned(for example, $1,000/month). Your “net income” is what is left after your employer takes our deductions for taxes, social security, Medicare, etc. This is also called your “take-home” pay. In order to know how much you can actually spend, you must accurately determine your net (take-home) pay.

Exercise #1: Calculate Average Monthly Take-Home Pay  
1. Find your gross income or total earnings on a payroll check stub, before any payroll deductions. $ ___________
2. Subtract deductions for federal, state, and local taxes; social security; insurance premiums; garnishments; child support; any other employee benefits; retirement or savings deductions; charitable deductions; etc. $ -__________
3. Subtract any other automatic deductions that you have authorized, like loan payments, savings plan, etc. $ -__________

4. If you are paid every week, twice a month or bi-weekly, use one of the following formulas to convert your pay to a monthly amount.

_______________per week x 4.333 = __________per month
_______________bi-weekly x 2.167 = __________per month
_______________twice a month x 2 = __________per month


$ -__________
5. If you have any other sources of income, or if your pay varies seasonally, calculate an average over six months or a year to account for the peaks and valleys. Add this amount to your other regular income. $ +__________


This is your: Total Average Monthly Income

$ ___________

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529 East High St.
Jefferson City, MO 65101

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The information provided in The Bisges Law Firm, P.C. web page is offered for informational purposes only, and it does not constitute legal advice. The Bisges Law Firm, P.C. does not have an attorney-client relationship with you based upon your visit to this web page. If you have a specific legal question, you should contact an attorney. The Bisges Law Firm is a debt relief agency.